Legislation to ensure pay equity for work of equal value falls flat

Only a free market will balance out pay inequities. If a company fails to compensate fairly, employees will simply move on

From conception to implementation, pay equity is a sham.

It’s obscured in double speak, packaged in seemingly laudable goals and promises great results. However, it can’t deliver them because it’s based on false premises. Any good that comes of it is far outweighed by the harm.

That’s why Canadians should be wary of any legislation promoting pay equity – including that recently introduced by the federal government.

“It’s never as easy as two people – man and woman – doing the same job, the woman being paid less than the man,” Prime Minister Justin Trudeau explained last February.

The public rightfully agrees that a man and a woman doing the same job equally well would be paid the same.

But this phrase and its goals are more crafty than that.

Ideologically, equal pay for work of equal value suggests something else. It would say that if a corporation’s engineers were mostly male and made $80,000 annually, but its clerical staff was mostly female and made only $40,000 annually, clearly that company is sexist. It pays secretaries less because it doesn’t value women and the contributions they make, so clearly they should make more.

Thus, pay equity relies on the same failed analysis as every other Marxist tenet: it sees everyone in relation to their class rather than as an individual.

These grievance zealots view the entire world predominantly through a race- or gender-based lens. Some complain that the corporate world doesn’t care about these inequities.

What they fail to realize is that since race and sex issues are irrelevant to such employers, they’re not discriminating on that basis in the first place.

The only way that equal pay for work of equal value can exist is in a free market. A smart employer will pay employees in proportion to the contribution they make to the company. If they don’t, the employee will move on to an employer who will or start their own business.

If there’s anyone who doesn’t believe in equal pay for work of equal value, it’s unions. They frequently oppose merit pay or right-to-work legislation that allows non-union employees to contend for jobs. People are all classified and paid according to their band level. Hard work can never be rewarded, nor laziness punished by dismissal or a change in pay. Mediocrity is glorified as virtuous, reinforced by equal pay for work of any value.

Nevertheless, unions will always endorse pay equity for obvious reasons. The first is that it aligns with the left-leaning proletariat bent. The second is that it only makes wages go up, not down. The result of any favourable pay equity decision is that women’s wages go up – and not (at least in the short-term) that men’s wages go down.

In addition, pay equity means many more government jobs, usually unionized, as pay equity is enforced. It also means unions can justify more dues on workers, then those organizations hire more staff to pursue the apparent opportunities created by more robust pay equity legislation.

And robust it is. The legislation will require employers to be proactive in their pay equity, meaning that all federally-regulated employers and innumerable government departments will have something else to think about, have meetings about, do seminars about and go endlessly on about, burying productivity in yet another process.

It’s woeful to ponder how onerous a proactive process could be when the reactive one was bad enough. It’s almost impossible to prove what’s in an employer’s head, making just decisions dubious.

Recently, after 30 years of legal wrangling, Canada’s Supreme Court chief justice wrapped up related to Canada Post in a rare 20-second verbal decision. Beverley McLachlan awarded $248 million in a pay equity decision to past female employees. Taxpayers paid for courts and lawyers for three decades, and now every Canadian who sends mail through the government monopoly will pay more to cover the gap.

In an Oct. 29 press release announcing its legislation, the government proclaimed, “When Canadian women can count on equal pay for work of equal value, our economy grows stronger, families prosper and communities thrive.”

Think again.

Lee Harding is research fellow for the Frontier Centre of Public Policy.